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photoshop1234 [79]
3 years ago
13

In the sales comparison approach, how is the appropriate unit of comparison chosen?

Business
1 answer:
kirill115 [55]3 years ago
5 0

Answer:

c. It depends on the appraisal problem. The appraiser should apply all appropriate units of comparison, explain differences in wide variation in the results, and choose the most reliable unit.

Explanation:

The three (3) main methods used for the valuation or appraisal of real-estate properties are;

I. Income approach.

II. Cost approach.

III. Sales comparison approach.

A sales comparison approach can be defined as a real-estate appraisal technique that is typically based on comparing a property to other recently sold real-estate properties with similar characteristics. Thus, this appraisal method or technique requires that the real-estate property being appraised should be in current use and fall within the same area or locality as the other recently sold real-estate properties.

In the sales comparison approach, the appraised property should mimic the market behavior of other real-estate properties sold recently.

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You own a portfolio which is valued at $8.5 million and which has a beta of 1.3. You would like to create a riskless portfolio b
Stells [14]

Answer:

The answer is option (c)  Short 34 contracts

Explanation:

Solution:

Given that

The information about the portfolio is as stated below:

The value of the portfolio = $8.5 million

The beta = 1.3

The future contract of S&P price = $1310

The size of contract  = 250

Now,

To hedge the risk completely, the desired beta is =0

Thus,

The number of contracts is calculated as follows:

The Number of contract = (desired beta - portfolio beta)*portfolio value/(future price*contract size)

So,

The number of contracts = (0 - 1.3)*8500000/(1310*250) = -34

Then,

The negative sign means  it is going short.

Hence,

A total of 340 contracts must be short.

8 0
3 years ago
The primary difference between accrued revenues and unearned revenues is that accrued revenues have:________. a) been recorded a
adoni [48]

Answer: D) not been recorded and unearned revenues have.

Explanation:

Accrued revenue is a term used to describe a sale that has been recognized by the seller, but which has not yet been billed to the customer. Accrued revenue is needed in order to match revenues with expenses. The absence of accrued revenue would tend to show excessively low initial revenue levels and low profits for a business, which does not properly indicate the true value of the organization.

Unearned revenue on the other hand is the money received from a customer for work that has not yet been performed (in advance payment). This is an advantage to the seller who now has the cash to perform the required services. Unearned revenue is a liability for the recipient of the payment.

3 0
3 years ago
During the announcement of the merger between Body Metal and​ Shimmer, the two CEOs neglected to mention that to avoid​ duplicat
irga5000 [103]

Answer:

unethical communication

Explanation:

unethical communication

unethical communication is that type of communication that sometime unethical for both side of business. it is practice of communication that give rise to doubtfulness in the business.

in the given question , unethical feeling arose due to doubtfulness of job of some employee because they may lost their job when both companies combined to form new one.

8 0
3 years ago
The current price for a good is ​$25​, and 100 units are demanded at that price. The price elasticity of demand for the good is
mrs_skeptik [129]

Answer:

Consumer surplus increases by $2

Explanation:

The consumer surplus can be defined as the benefit that consumers gain when they pay less for a good that they are willing to pay more for.

a). Determine the final demand as follows;

Price elasticity of demand=% change in price/% change in demand

where;

price elasticity of demand=-1

% change in price={(Final price-initial price)/initial price}×100

Final price=$24

initial price=$25

% change in price=(24-25)/25=(1/25)×100=-4%

% change in demand=x

replacing in the original expression;

-1=-4/x

x=4%

% change in quantity={final quantity-initial quantity/initial quantity}×100

let final quantity=y

4%={(y-100)/100}×100

0.04=(y-100)/100

4=y-100

y=4+100=104

final quantity=104 units

Consumer surplus=(1/2)×change in price×change in quantity

where;

change in price=25-24=1

change in quantity=104-100=4

Consumer surplus=(1/2)×1×4=2

Consumer surplus increases by $2

8 0
3 years ago
eggy's Pillows produces and sells a decorative pillow for $75.00 per unit. In the first month of operation, 2,000 units were pro
vivado [14]

Answer:

Total cost of goods sold per unit is $35,000

Explanation:

Given Data:

cost for decorative pillow =$75.00 per unit

Total sold unit = 1750

Per unit manufacturing cost

we know that  Variable Costing includes only manufacturing cost

Therefore, the total cost of goods as per variable costing can be computed as follow  

$20 \times  1750 = $35,000

The total cost of goods sold per unit is $35,000

4 0
3 years ago
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